Money Rules You Can Ignore

I’m a big rule follower, I believe they keep everything running smoothly and help guide you. After all they’re rules for a reason, right? Well usually. Money rules in particular can be finicky as each persons monetary status is different. You may not want to invest all of your money on stocks if you still have debt to pay off.. ect. The point is that when it comes to money use the rules as a guideline but make sure to keep your own finances in mind. Here are 3 rules that you can break.

1. Invest in a 401K.

So you may not know exactly what it is but I’m sure you’ve heard of it. A 401K (or Roth IRA) fund is what ensures that when you retire you will have a safe cushion of money saved up. They’re especially great if your job will match the amount you put towards it, giving you double money in the end. Whether or not to invest depends on your debt, your goals, and what your plan has to offer. If you are trying to pay off loans with high rates, continue doing so. If you are not able to put towards your retirement just yet that’s fine, especially since many credit card and loan rates are at a higher percentage than the amount you are saving for future you. Basically, your spending money to owe more for the time being. Many experts will advise you to only invest in a 401K if your company matches you or has good rates. Or you can opt out of the 401 and open a IRA or Roth IRA account which will still count towards your retirement. The difference is an IRA account you don’t pay taxes on just yet, a Roth IRA account you pay now but come retirement time its smooth sailing. Decide on what is best for you before you jump into a plan.

2.Buying is better than renting.
Renting an apartment can be a financially smart decision. If you are in a place in your life where you don’t have an emergency fund to replace (name broken house affiliation here) than renting is a good choice because you have someone who is obligated to fix any last minute surprise. Read: you’re covered. Before you rush into buying a house think to yourself if you plan to live in said place for at least 5 years. Are you planning to move? Are there any deal breakers you wont be able to live with? Think long and hard. You also need to consider if you can reasonably afford to buy. Account for any hidden fees associated with buying (lawyer fees, insurance, ect). And remember, if you can’t afford right now that is fine. You can start saving for a house.

3. Pay off your student loans, STAT.
It is true that you should pay your loans off as soon as you can afford to in an effort to avoid the hassles that are associated with them such as nagging phone calls, a tarnished credit score, and high interest rates. But don’t neglect your other debts while doing so. Remember that many credit card rates end up being higher than your current loan rates, making it financially responsible to portion some money into paying them off also. Pay the same amount to your loan agency each month, for at least 12 months. This will secure your stability with them and report kindly back to your credit report. You do not want to jump around with the amount of money you pay each month. Slow and steady wins the race here.